The Pakistan Credit Rating Agency Limited
17-Apr-19
Analyst
Ayesha Qasim
ayesha.qasim@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA
PACRA Maintains Stability Rating of Faysal Income and Growth Fund
| Rating Type | Stability Rating | |
|
Current (17-Apr-19 ) |
Previous (26-Dec-18 ) |
|
| Action | Maintain | Maintain |
| Long Term | A(f) | A(f) |
| Short Term | - | - |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
Faysal Income & Growth Fund (FIGF) seeks to provide its investors with optimal yields through a diversified portfolio consisting of both long-term fixed instruments as well as short-term money market securities.
The rating reflects the fund's good credit quality and liquidity profile. At end-Dec 18, fund's placements with banks were ~55%. The majority of the exposure was with banks rated 'AA-' i.e. ~54%. The remaining assets were invested in TFCs with rating 'A' and above. The unit holding pattern of the fund is highly concentrated with top 10 investors representing ~78% of the fund's assets, (of which ~38% are owned investments) which exposes the fund to a low level of redemption pressure.
Going forward, the fund intends to maintain its exposure towards debt instruments. The remaining majority assets of the fund will be placed with banks rated ‘A+‘ and above. Material changes in the fund's asset allocation strategy, which could negatively impact the fund's credit quality and exposure to interest rate risk, remains critical for the rating.
About
the Entity
Faysal Asset Management Limited was incorporated in 2003 as an unlisted public limited company under the company's ordinance, 1984. The major shareholding lies with Faysal Bank Limited having almost the entire stake in the company. During Nov-18, Faysal Bank Limited acquired ~50% stake from Bahamas Ltd and 20% from Mr. Razi Ur Rahman Khan – the former CEO of the company. The company is managing a diversified portfolio of nine open-end funds having AUMs of ~PKR 9.3 billion at end-Dec'18.
The former CEO, Mr. Razi-ur-Rahman Khan left the company amid Nov-18. During Dec-18, Mr. Latif has been appointed as the new CEO of Faysal Asset Management Limited. Mr. Latif has been associated with the capital markets for fifteen years. Mr. Latif is a LUMS Alumni and has done a number of capital market courses with CFA association, Daiwa, J.P. Morgan and Bahrain Institute of Banking and Finance (BIBF). He has also completed his Director certification program from IBA.